Any dealer who has not paid attention to Paula Deen’s recent troubles should study the situation.

She was an American success story. Starting in Savannah, G,A in a restaurant famous for its fried chicken, Deen built a comfort-food conglomerate that Forbes magazine estimated earned $17 million last year on total revenues of nearly $100 million. She was a food star until news broke about her deposition in a lawsuit alleging an inappropriate workplace atmosphere. The suit was filed by an employee of a restaurant Deen and her brother co-own.

Most Americans knew nothing of the lawsuit until news of the deposition. The attention-grabber was Deen’s admission that she had used the “n-word.” Critics seized on other testimony they said portrayed a less-than-enlightened attitude on racial issues.

Once the story broke nationally, she was in a firestorm. The fallout from the coverage was devastating, ranging from loss of her cable TV show to cancellation of endorsements. Her reputation and business were wrecked.

So what can a dealer learn from this? Plenty. Deen is an example of how quickly things can go wrong for a businessperson. She went from a famous flack of fried foods to a vilified racist. And it happened almost overnight.

What can happen if your dealership winds up in the media thumping barrel? You may dismiss the possibility of being labeled a racist because of enlightened attitudes at your dealership. But what if a salesperson’s complaint about a ridiculous remark in a sales meeting leads to your dealership being labeled as sexist?

What if some silly statement in training gets your store branded as arrogant? Or if some stupid jokes among employees about customers get your dealership tagged as arrogant and uncaring about consumers?

Don’t get Deened. When negative publicity starts, the online sarcasm can fill Web pages and the jokes can multiply. The situation can get out of control quickly. Here are some suggestions on how to prevent and handle such situations.

  • Control the atmosphere in your dealership. Sales-meeting jokes or employee bantering on the floor can easily be misconstrued. The best way to protect against claims of a hateful and discriminatory environment is to prevent it. First layers of protection are good personnel policies, training, monitoring compliance and taking action when behavior deviates from stated standards.
  • Do an early and thorough investigation of every complaint, whether from an employee or a customer. This is your second layer of protection if done correctly. Problems usually will bubble up as complaints before they become public lawsuits. If there is a problem or the allegations may lead to embarrassing publicity, nip it in the bud. An early settlement usually is the cheapest solution. If you are sued, make sure your lawyer knows all the facts, good and bad. Dealership personnel, many of them excellent salespeople, often approach lawyers with the idea they can sell them on the validity of the dealership’s position by emphasizing the positive. Your dealership’s attorney must be in a position to honestly evaluate your potential for an adverse decision and for P.R. headaches.
  • If you find yourself in litigation, preparation for every deposition is critical. Go through all the matters that could conceivably come up. This will give those being deposed the opportunity to hear how testimony will sound. It also allows the attorney to understand potential vulnerabilities and get in front of problems.

Deen’s fall was staggering in its swiftness and severity. However, no businessperson today, with the Internet’s capacity to spread stories in minutes, can feel immune from such treatment. It is more important than ever to be proactive to protect your dealership.

Michael Charapp is a lawyer who represents auto dealers. Based in McLean, VA, he is at 703- 564-0220 and mike.charapp@cwattorneys.com